Target Hospitality Corp. · NASDAQ:TH
Target Hospitality — Investor Presentation (May 2023)
33 slides from Target Hospitality's investor presentation, May 2023
Slide 1: Investor Presentation May 2023
Investor Presentation May 2023
Slide 2: Disclaimer
Disclaimer Cautionary Statement Regarding Forward-Looking Statements This presentation contains statements reflecting assumptions, expectations, projections, intentions or beliefs about future events that are intended as “forward-looking statements.” You can identify these statements by the fact tha
Slide 3: Target Hospitality (NASDAQ: TH)
Target Hospitality (NASDAQ: TH) North America’s Largest Provider of Key Differentiating Attributes Comprehensive Hospitality Solutions TH leverages a premier network and first-class customer base, which Strategically located network creates scale North America’s Largest provides increased revenue
Slide 4: Differentiated & Compelling Investment Opportunity
Differentiated & Compelling Investment Opportunity Leading provider of full turnkey vertically integrated modular accommodations and value-added hospitality services with powerful unit economics Strong presence in core end markets providing critical service offerings to a diversified customer base t
Slide 5: Diversified Value-Enhancing Business Model
Diversified Value-Enhancing Business Model Strategically Focused on Enhancing Value through a Balanced Portfolio of Service Offerings Premier Network Creating Value with Existing Core Competencies Network size and scale provide efficient operating structure and Utilizing existing capabilities to ide
Slide 6: Proven Track Record of Business Transformation
Proven Track Record of Business Transformation 2014 2019 2022 Provider of turnkey specialty rental Largest provider of vertically-integrated North America’s largest provider of full turnkey Business Profile units to niche customer hospitality services hospitality solutions and holistic support servi
Slide 7: Contract Structure Drives Long-Term Revenue Visibility
Contract Structure Drives Long-Term Revenue Visibility Multiyear Contracts Provide Greater Visibility on Long-Term Revenue and Cash Flow Attractive Exposure to Multiple End Markets Supports Diversified Revenue Weighted Average Contract Length 4 Years Hospitality and Facilities Services Government Se
Slide 8: Creating Positive Social Change
Creating Positive Social Change Caring for Vulnerable Populations Through Critical Humanitarian Solutions Children and family units come to the United States to escape desperate situations, including Caring poverty, violence and exploitation Target’s humanitarian solutions create a nurturing environ
Slide 9: Expanded Humanitarian Community
Expanded Humanitarian Community Thoughtfully Designed and Purpose Built for a Vibrant and Welcoming Environment Investor Presentation | 9
Slide 10: Expanded Humanitarian Community
Expanded Humanitarian Community Dedicated to Promoting Mental and Physical Well-Being Investor Presentation | 10
Slide 11: Trusted Provider of Critical Humanitarian Solutions
Trusted Provider of Critical Humanitarian Solutions Target’s Best-In-Class Communities and Humanitarian Solutions Extend Beyond Party Lines 3,000 Obama Trump Biden March 2023 - Target's non-profit partner awarded 5-year IDIQ contract (additional 5-year option) 2,500 Southwest Border Encounters (000'
Slide 12: Expanded and Enhanced Humanitarian Support
Expanded and Enhanced Humanitarian Support Expanded Operational Scope Creates Comprehensive and Highly Customized Solutions Real Estate 11 geographic 6,400 ~1,600 Over 3 miles of over 280 Acres sites in the Pecos, total beds modular buildings sidewalks Texas area 6 Outdoor Covered 10 Indoor 14 Educa
Slide 13: Expanded Contract Supports Enhanced Economics
Expanded Contract Supports Enhanced Economics Meaningful Contract Scope Expansion and Highly Customized Assets Supports Longevity of Enhanced Holistic Service Offering Comprehensive hospitality services and customized infrastructure solutions supporting 6,400 individuals Initial contract term provid
Slide 14: Growth Aspirations
Financial Update Growth Aspirations Investor Presentation | 14
Slide 15: Multiple Value Enhancing Growth Levers
Multiple Value Enhancing Growth Levers Strength in Core Offerings Underpins Multiple Avenues to Accelerate Growth Seeking to Allocate +$500 million of Growth Capital Through 2027 1 2 3 Continued Growth of Legacy Expansion of Government Extension in Adjacent HFS Business Service Offerings Commercial
Slide 16: Managing Legacy Portfolio
1 Managing Legacy Portfolio North America’s largest strategically located network supports an efficient Established 28 Premier operating structure and provides the optimal foundation to match growing Platform Communities (1) customer demand with minimal capital requirements Top-tier natural resource
Slide 17: Growing Government Service Offerings
2 Growing Government Service Offerings Established provider of premier comprehensive hospitality solutions to the Premier United States Government, supporting the two largest permanent hospitality 8,800 Beds Provider solutions for the Government’s humanitarian aid efforts Intentionally increased exp
Slide 18: Extending Reach to Adjacent End Markets
3 Extending Reach to Adjacent End Markets Individual elements of Target’s existing core service offering provide unique ~14 Million Superior opportunities to pursue attractive growth opportunities Annual Meals Capabilities Served (1) Strong national presence creates a platform to expand geographical
Slide 19: Financial Strength
Financial Update Financial Strength Investor Presentation | 19
Slide 20: Strong First Quarter 2023 Financial Performance
Strong First Quarter 2023 Financial Performance Sustained Business Momentum and Continued Achievement of Strategic Objectives First Quarter Highlights Consistently Enhancing Financial Strength Revenue increased 84% to ~$148 million compared to the Over $350 million of cumulative debt reduction s
Slide 21: Strategic Principles Support Positive Momentum
Strategic Principles Support Positive Momentum Continued Strength in Core Business and Customer Demand Diversification of End-Markets Provides Strong Revenue Visibility Generating Meaningful Discretionary Cash Flow Achieving Strategic Objectives Preliminary 2023 Financial Outlook(3) Transformative
Slide 22: Enhanced Balance Sheet and Liquidity
Enhanced Balance Sheet and Liquidity Total available liquidity of $167 million TH Capitalization and Liquidity $210(1) million of 9.5% senior secured notes, maturing $ in millions 3/31/2023 Cash and Cash Equivalents $42.4 March 2024 ABL Facility - $125 million capacity - Executed $125 million
Slide 23: Powerful HFS Unit Economics (Illustrative)
Powerful HFS Unit Economics (Illustrative) Inputs: Estimated Outputs1: Community Size: 500 Beds Annual Revenue: $14 million Investment: $61,000 per bed Adj. EBITDA2: $7 million ADR / COGS: $76 / $51 Cumulative Minimal Recurring Maintenance Capital Adj. EBITDA (20 years)2: $106 million
Slide 24: Efficient Capital Deployment Drives Returns
Efficient Capital Deployment Drives Returns Target’s efficient operating structure and unique capabilities, create a highly scalable business model, providing the foundation to meet increasing customer demand with little incremental capital High quality contracts support meaningful cash generati
Slide 25: Diversified and Unique Peer Universe
Diversified and Unique Peer Universe Target’s unique service offering, and diversified customer base supports a broad peer universe Unique business fundamentals align with a range of attractive end markets Target shares increasingly relevant attributes with government service focused peers Large,
Slide 26: Top Tier Financial Metrics Support Premium Valuation
Top Tier Financial Metrics Support Premium Valuation Achieving Best-in-Class Operating Margins Generating Significant Discretionary Cash Flow Margin Profile, Cash Flow and Diversified Customer Base Supports Multiple Expansion LTM Adjusted Gross Profit Margin(1) Current EV to Adjusted EBITDA(2)(3) 70
Slide 27: Appendix
Appendix Appendix Investor Presentation | 27
Slide 28: Consistent and Predictable Revenue Visibility
Consistent and Predictable Revenue Visibility Contract structure, including exclusivity, provide consistent and predictable quarterly revenue Emphasizing importance of consistent customer renewal rate of +90% +85% of Historical Quarterly Revenue Committed or Included Exclusivity 100% 90% 80% 70% 60%
Slide 29: All Inclusive Service Offerings
All Inclusive Service Offerings Full Turnkey Culinary Full Turnkey Technological Services Supply Chain Services Services Maintenance Services Full Turnkey Full Turnkey Full Turnkey Site Services Facilities Management Janitorial Services Transportation Services Safety and Waste Utilities Services Adm
Slide 30: Non-GAAP Reconciliations
Non-GAAP Reconciliations Target Hospitality Corp. Reconciliation of Net Income to EBITDA, Adjusted EBITDA ($ in thousands) For the Three Months Ended For the Fifty-One Months Ended March 31, March 31, 2023 2023 2022 Total Revenue $ 147,819 $ 80,335 $ 1,487,384 Net income (loss) $ 43,825 $ 494 $ 100,
Slide 31: Non-GAAP Reconciliations
Non-GAAP Reconciliations Target Hospitality Corp. Reconciliation of Net cash provided by operating activities to Discretionary cash flow ($ in thousands) For the Three Months Ended For the Twelve Months Ended March 31, March 21, 2023 2023 2022 Total Revenue $ 147,819 $ 80,335 $ 569,470 Net cash prov
Slide 32: Non-GAAP Reconciliations
Non-GAAP Reconciliations Target Hospitality Corp. Reconciliation of Gross Profit to Adjusted gross profit and Adjusted gross profit margin ($ in thousands) For the Twelve Months Ended March 31, 2023 Total Revenue $ 569,470 Gross Profit $ 301,175 Adjustments: Depreciation of specialty rental assets 5
Slide 33: Investor Presentation
5) TARGET’ HOSPITALITY 5-) TARGET HOSPITALITY investor Presentation | 33
Target Hospitality — Investor Presentation (May 2023) on 6ix